Mongolia Lands BlackRock for Its SOE Reform

Mongolia's SOE reform plan calls for consolidating state shares under a Sovereign Wealth Fund and listing a first portfolio internationally by end-2027, with Franklin Templeton signed on in June as the government's first outside partner. The roster working on it just got bigger. The Government of Mongolia has signed a Memorandum of Understanding with BlackRock FMA, the Financial Markets Advisory arm of the world's largest asset manager.

The Sector Being Fixed

Mongolia's SOE sector is larger than the headline count suggests. Officially there are about 100 SOEs, consolidating to 67, including roughly 21 mining and mineral firms now under the Chinggis Khaan Sovereign Wealth Fund Corporation, the former Erdenes Mongol. Together they employ about 60,700 people and hold roughly ₮60 trillion in assets. The SWF itself currently holds about $2.431 billion, with mining royalties, SOE dividends, and proceeds from the roadmap's planned IPOs of roughly 20 enterprises expected to grow it over the coming years.

Behind those numbers sits a sector where roughly one in four SOEs runs at a loss, and boards are still dominated by government officials rather than independent professionals. The government's 2025-2028 roadmap calls for shrinking the number of SOEs further, consolidating chronic loss-makers, and bringing an initial 20 major enterprises to market through IPOs and dual listings, but only once governance and financial standing meet international benchmarks.

Mongolia has attempted SOE reform before, across successive cabinets and roadmaps, with most efforts stalling on political interference, weak enforcement, and resistance from officials sitting on the boards being reformed. Franklin Templeton, with a 75-year history across more than 30 countries, has previously guided state-linked assets through comparable governance reforms in Romania and Uzbekistan. BlackRock's FMA arm has advised governments and central banks on similar institutional building elsewhere. Their involvement does not guarantee this round succeeds, but it puts two outside parties with their own reputations tied to the outcome, something absent from Mongolia's earlier attempts. 

What "The Biggest" Actually Brings

BlackRock currently manages $15.3 trillion in assets, against Franklin Templeton's $1.80 trillion and the Chinggis Khaan Sovereign Wealth Fund's $2.431 billion, a gap of roughly six thousand times. But the more relevant fact is that FMA, the BlackRock unit signing this MoU, is not the arm managing that $15.3 trillion. It is BlackRock's advisory practice, founded in 2008 to help governments and central banks navigate the financial crisis, and its job is building institutional capacity, not managing money. FMA has advised sovereign wealth funds and central banks across roughly 40 countries, the kind of bench a fund a year into its own restructuring cannot build internally. 

Having both firms in the room also raises the cost of the government backing away from its own governance commitments. Neither name is casually attached to a fund with Mongolia's history, and their presence signals to other institutional investors that someone with a reputation to protect has looked closely and chosen to stay.

The Math Still Has to Work

Valuing and ranking over a hundred SOEs, restructuring boards, lifting reporting to international standards, legally structuring the Sovereign Wealth Fund, and drafting and marketing offering documents, all before end-2027, was already a tight sequence with one outside partner. It's also worth noting that this remains an MoU, not a binding commitment. Two globally recognized names are now attached to the process, which raises the reputational cost of the timeline slipping, but does not by itself guarantee the timeline holds.

The signing is the easy part. But after three decades of reform promises that went nowhere, having two of the biggest names in global finance on board finally feels like a light at the end of the tunnel.